Friday, July 9, 2010

A couple of years ago I posted an article (available here) discussing the case of Monsanto v. Cefetra. Essentially, in that case a European court held that Monsanto patents claiming the gene responsible for its Roundup Ready trait were not infringed by the importation of soy meal containing the gene, because the grinding of the soybeans to make the meal rendered the DNA incapable of expressing the encoded protein, and thus unprotectable pursuant to the 1998 European Union Directive on biotechnology.

On Tuesday, July 6, that decision was affirmed by the Court of Justice of the European Union. This is the highest judicial body of the European Union, so there will be no further appeals, and this would appear to be the final word on the subject. The decision was reported in an article posted on IPKat, a respected European IP blog, available here. I am no expert on European law, but here are a few thoughts on the significance of this case.

First, my interpretation of the decision.

In a nutshell, the Court of Justice held that although the so-called Biotech Directive, promulgated by the European Union in 1998, permits the patenting of naturally occurring DNA sequences, the scope of patent protection only extends to products incorporating the DNA if the DNA is capable of performing “the function for which it was patented." Applying this criterion to the facts of the case, the Court held that the patentable function of the gene at issue was to confer glyphosate (i.e., RoundUp) resistance upon a plant, and that since the soy meal is dead and thus incapable of expressing this function, the DNA residing in the soy meal is ineligible for patent protection.

The Court went on to hold that the Biotech Directive supersedes national law, and precludes individual European nations from enacting legislation that would permit patenting of DNA sequence per se. It also held that the prohibition against patenting DNA sequences per se applies retroactively to patents predating the EU’s adoption of Directive in 1998. In short, this unappealable ruling appears to be binding upon all 27 European Union Member States, and all DNA patents, no matter when they were issued.

The ruling could have a substantial impact on biotechnology. Obviously, it provides an opening for growers to circumvent gene patents used to protect genetically modified crops by growing the crops in a country where the gene is not patented, such as Argentina in this case, or in a jurisdiction with weak patent enforcement, and then importing the product into a European Union member wherein the patent is in force with impunity.

According to the logic of the decision, if viable seeds were imported, they would likely be found infringing because the DNA would still be capable of performing the function for which it was patented. But if the product has been processed, and as a result no longer viable, as exemplified by the soy meal at issue in this case, importation should not be found to constitute infringement.

The ruling could also have implications for the scope of protection afforded by gene patents for genetic diagnostic testing. Genetic diagnostic testing, such as by DNA sequencing, typically involves the isolation and/or amplification of the gene sequence being tested. This isolation and amplification might be characterized as the manufacture of the DNA, which could constitute infringement of a patent claiming the DNA sequence. For example, the ACLU challenge to Myriad’s BRCA gene patents is based in part on an assumption that the patent claims reciting isolated BRCA sequences would be infringed by unauthorized testing for mutations in the BRCA genes (which typically involves DNA sequencing).

However, this assumption is premised on the patents covering the isolated DNA sequences per se. But arguably, the isolated and amplified DNA fragments generated in the course of DNA sequencing and testing are not capable of performing their function, and thus after this week’s Court of Justice decision are ineligible for patent coverage in the European Union.

Of course, this would depend upon how one defines the "function of the patented gene. For example, one might argue that one important function of BRCA sequences claimed in Myriad’s patents is for diagnostic testing, and hence isolated DNA sequences generated in the course of genetic testing are performing a function for which they are patented

However, under a more restrictive view the function of the BRCA genetic sequences is to code for the BRCA protein product, i.e., the actual physiological function of the BRCA gene in the human body. Myriad’s patents specifically discuss use of the isolated BRCA gene for production of the BRCA protein in a recombinant cell, which could be a useful research tool in drug discovery. As discussed in earlier posts relating to the ACLU lawsuit, I point out that in practice BRCA testing does not involve the amplification of the full length BRCA coding sequence, but only amplicons representing fragments of the gene. These fragments would not be capable of achieving the function of expressing the full-length protein, and thus arguably lack the requisite functional potential.

I think reasonable minds could go either way on the issue, but given the current level of antipathy towards the use of gene patents to block genetic diagnostic testing, I can envision a European court adopting a restrictive interpretation of what it means for a genetic sequence to be capable of performing its patentable function, and decide that gene patent coverage does not extend to use of the genetic sequence in diagnostic testing.

In a related context, the Court’s decision could have implications for the effect of gene patents on whole genome sequencing. There is much buzz these days regarding the imminent arrival of personal whole genome sequencing, which will permit individuals to have their entire genome sequenced for a relatively small amount of money. Some have worried that a thicket of gene patents might impede the ability of firms to provide whole genome sequencing. However, DNA “manufactured” in the course of whole genome sequencing is unlikely to be found capable of performing the function of individual patented genetic sequences residing therein, in which case genome sequencing would not result in patent infringement liability in Europe.

I personally do not think gene patents will substantially impede whole genome sequencing, in the US or elsewhere. But if I am wrong, and patents on genes pose a substantial impediment to whole genome sequencing in the US, the patents could be circumvented by exporting the process to a place like Europe. The EU court decision could substantially reduce the likelihood that whole genome sequencing in Europe will result in liability for patent infringement.

On the other hand, the ruling should not affect the ability of biotechnology companies to use gene patents to protect their biologic drugs. In this context, the patented gene is performing its primary function of expressing the protein encoded by the gene, and thus satisfies the criterion established by Tuesday's decision of the Court of Justice.

27 comments:

The other major India specific point in Monsanto v. Cefetra, apart from the precedent setting one, worthy of consideration here is a hypothetical scenario with Bt cotton in India. It is estimated the Bt seed that is sold with a patentee premium in India is hardly 60% of the total Bt seed sold here. We have a thriving woven cotton industry exporting to many parts of the world including the EU, where the Bt gene is under patent protection. Had the ruling gone against this for the DNA stretches, the importers of such cotton material might have faced lawsuits from the inventor company in an attempt to recoup payments it has not managed to get from some Indian growers. This situation can be extrapolated on any number of derivative products from plants containing patented genes. The impact of such a development on the economy would have been sizable, to say the least... Rca Godbole

Chris,"Because the grinding of the soybeans to make the meal rendered the DNA incapable of expressing the encoded protein" - This is just simply wrong.I don't know the exact grinding process for soy in Europe (pretty certain it does not include DNase treatment), but even someone with limited skills in the art should be able to retrieve the gene from soy meal and show it still can perform its function. PCR may or may not count (as it is not retrieving the exact same molecule), but lambda GT11 or any type of functional library screen should do the trick. DNA is a pretty resilient molecule as shown by Svante Pääbo and others. A gene/wheel can still perform its function when removed from the host/car, maybe not independently but certainly in the context of a new host/car.

You are correct of course, in the decision the court based its decision on fact that DNA could not be expressed in the soy meal. Monsanto of course made argument that DNA is still viable and could be pulled out and expressed in a different host, as you explain, but the court found that this did not render the soy meal patentable.

Interesting arguments. The Monsanto ruling makes much sense. A different decision would have facilitated a ridiculous amount of unnecessary patent litigation. Also, it seems fair, since one has to draw the patent-eligibility line somewhere. Though I suppose the anomalous treatment of genetic products could be grounds for accusations of arbitrariness. The Myriad case, now on appeal, presents intriguing possibilities for the future of biotech patent law.

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About Me

I am a law professor at the University of Missouri-Kansas City School of Law. My primary research interests lie at the intersection of biotechnology and intellectual property. This blog provides analysis and commentary on recent developments relevant to this area of the law.